When selecting health care plans to offer to employees, businesses are faced with a myriad of potential choices. Selecting from health care plans is a complex decision because each of the plans typically offers different mixes of services and costs to businesses and their employees. To assist businesses in making these decisions, health care plans may be grouped together into classes offering similar sets or types of services, thereby allowing businesses to compare plans offering relatively comparable services. For instance, plans may be grouped into an “accredited” class if they are reviewed by the National Counsel for Quality Assurance (NCQ4) and meet certain standards. See www.NCQA.org for more information on accreditation of health plans. However, when comparing two classes of health care plans, businesses must still perform relatively complicated cost-to-benefit analyses. For instance, accredited plans may offer more health care services at a higher cost relative to non-accredited plans. The business must then assess whether the additional benefits and services of the accredited plans justify the additional costs.
While the process of comparing direct costs and services is relatively straightforward, it may be difficult and expensive for a business to measure indirect economic benefits from services offered by a class of health care plans. In particular, providing a certain service, despite adding additional costs, may be economically advantageous to a business. For example, improved employee health provided by particular health care services may benefit a business by increasing employee productivity and lowering absenteeism rates.